We’ve all felt it. That feeling you get when you know something is going to happen that you don’t want to happen, but you have no control and can’t stop it. It’s a feeling of dread. So, what do you do? In many cases, we ignore it and hope it goes away. The Sydney residential property market has reached a point now that can no longer be ignored. So here we go….
The Reserve Bank announcing a substantial 0.5% interest rate rise and news last week that Sydney home values recorded a -1.0% is not what any homeowner or investor wanted to hear, myself included. I’ve been warning for months that the incredible rates of growth in value and high demand would not last forever but that doesn’t make these latest numbers and announcements any easier to digest.
Values have been easing gradually to now sit at -1.4% for the Quarter. The rate rise this week may well accelerate that easing as those in the market respond to the reality that inflation is starting to impact more than just the price of lettuce at the supermarket. It’s starting to impact sentiment.
For our team at Morton what that means is we need to work as hard as always, but perhaps a little bit differently.
When the market was going gangbusters and demand for property was at record levels our team were able to identify buyers active in the market through our carefully cultivated networks and successfully negotiate significant sales without having to officially take a property to market.
But with a growing change in sentiment potential buyers are going to be increasingly reticent to actively search for a property. The motivation to move will be dulled by the weight of discussions and calculations around rising costs and expectations that things will get worse before they get better.
However… and this is the important point to remember… those potential buyers don’t necessarily disappear. The reasons for buyers entering the market for a new property don’t automatically go away. It is just our team needs to employ different strategies to identify them and work with those people to help them identify the right property that will deliver them the right outcomes even with the changing economic outlook.
It is in these circumstances that marketing and relationship really matter. When people are reluctant to come forward vendors need to embrace the idea that you can’t sell a secret. Carefully considered and targeted marketing can make a huge difference to generating interest that will deliver competition for a property that in turn will secure the best property result.
So, my message to the market is that it is all still possible. Our team know what’s required and how to do it and we are always ready to do what’s different and what’s needed to deliver for our clients.